Envotherms Terms and Conditions
General Conditions for the Delivery and Installation of Machinery and Other Mechanical, Electrical and Electronic Equipment.
Issued in 1994 by the engineering industry organizations in Denmark, Finland, Norway and Sweden
The Confederation of Danish Industry (Denmark), Metalliteollisuuden Keskusliitto – The Central Association of Finnish Metal Industries (Finland), The Federation of Norwegian Manufacturing Industries (Norway), and The Federation of Swedish Industries (Sweden)
Application
1. The following general conditions shall apply if the parties have agreed to them in writing or otherwise. If the conditions apply to a delivery, any deviations must be agreed upon in writing between the parties.
Definitions
2. In these general conditions, the following terms are defined as follows:
The Agreement
The parties’ written contract concerning the Delivery, including all contract appendices, as well as agreed Changes and additions to the mentioned documents. Conditions in the Agreement that deviate from the following general conditions shall take precedence over these.
The Equipment:
All machinery, equipment, materials, and items to be delivered by the supplier in accordance with the Agreement.
The Delivery
The Equipment as well as the result of the work to be performed by the supplier in accordance with the Agreement. If the Delivery under the Agreement is to be taken over in separate parts intended to be used independently of each other, the provisions of these conditions shall apply to each part individually. Therefore, in such cases, the Delivery refers to each individual part.
The Installation Site:
The place where the Delivery is to be installed, including the immediately adjacent areas necessary in connection with the transport, unloading, and storage of the Equipment and any accessories.
The Contract Price
The payment, exclusive of value-added tax, to be made for the Delivery. If payment for installation is to be made based on invoicing and the installation work is not completed, the Contract Price in clauses 20, 24, 47, and 48 shall be determined as the price for the Equipment plus 10% or the percentage agreed upon by the parties.
Written Notice
Any document signed by one of the parties and received by the other party. A Written Notice shall also include a message received by the other party via telegraph, telefax, or telex identifying the sender, as well as e-mail, but not other electronically transmitted messages.
Product Information
3. Information in product information and price lists is only binding to the extent that the Agreement expressly refers to them.
Drawings and Other Technical Documents
4. All drawings and other technical documents relating to the Delivery, which are handed over from one party to the other before or after the conclusion of the Agreement, remain the property of the party that provided them. Received drawings, other technical documents, or technical information may not be used for purposes other than those intended at the time of transfer without the consent of the other party. Without such consent, the mentioned materials must not be copied or reproduced.
5. The supplier shall, no later than at the time of takeover, provide the buyer free of charge with one or an agreed larger number of copies of drawings and other technical documents sufficiently detailed to enable the buyer to carry out commissioning, operation, and maintenance, including ongoing repairs of the Delivery. However, the supplier is not obliged to hand over drawings and documents that form the basis for the manufacture of the equipment or spare parts.
Confidentiality
6. Neither party shall, without the consent of the other party, disclose to any third party such technical or commercial information that the other party has designated as confidential at the time of entering into the Agreement or thereafter. However, this does not apply to the extent that such information is necessary for the parties to fulfill their obligations under the Agreement or is necessary for the operation and maintenance of the Delivery.
The parties are obligated to prevent the confidential information mentioned above, beyond what is described in the first paragraph, from being disclosed to or used by their employees, consultants, subcontractors, other suppliers, or others who have or may gain access to such information within the party’s organization.
Scope of the Delivery. Laws and Regulations
7. The Delivery shall have the scope as specified in the Agreement. The Delivery must comply with the laws, regulations, and provisions in force at the time of the offer in the country where the Installation Site is located. At the supplier’s request, the buyer is obliged to provide information about the laws and other regulations applicable to the Delivery.
8. The supplier shall carry out such modification work as necessitated by changes in the laws, regulations, and provisions applicable to the Delivery that occur between the offer date and the takeover. The same applies to changes in the generally accepted interpretation of such laws, regulations, and provisions. The provisions in clauses 35 and 36 shall apply to such modification work.
Working Conditions
9. The buyer is responsible towards the supplier for ensuring that the installation is carried out under conditions that comply with the applicable laws and regulations concerning the working environment at the Installation Site. The buyer shall also provide the supplier with Written Notice of the safety regulations applicable to personnel at the Installation Site.
Furthermore, the buyer shall, at their own expense, provide satisfactory changing, washing, and dining facilities for the installation personnel at or near the Installation Site. The buyer is also responsible for ensuring that the supplier’s personnel receive food and lodging near the Installation Site in accordance with applicable collective agreements and regulations, or as specified in the Agreement. Unless otherwise agreed, expenses for food and lodging shall be paid by the supplier.
Preparation for Installation
10. The supplier shall give the buyer Written Notice of when the Equipment will be ready for installation with sufficient time for the buyer to take the necessary measures he is obligated to under clauses 11, 12, and 13, so that the installation can be carried out.
11. Unless otherwise agreed, the supplier shall provide the buyer in good time with drawings or descriptions showing how the Equipment is to be installed. At the same time, the supplier shall provide all information necessary for the construction of foundations and other bases required by the Delivery. Furthermore, the supplier shall provide all information necessary to ensure convenient access for the Equipment and the necessary equipment to and at the Installation Site, as well as for the establishment of all required connections to the Equipment.
Any costs arising from errors or deficiencies in the drawings, descriptions, or information mentioned above that become apparent before takeover shall be borne by the supplier. Errors that become apparent after takeover shall be handled according to the provisions in clauses 52–66.
12. The buyer shall carry out the necessary preparatory work in accordance with the drawings, descriptions, and information referred to in clause 11. Unless the parties have agreed on the completion date of the buyer’s work, this shall be completed no later than one week before the installation is to begin, ensuring that the foundations and bases are ready to receive the Equipment at the scheduled time. The buyer shall notify the supplier by Written Notice when the preparatory work has been completed.
13. The buyer shall ensure that water and power sources, including compressed air and electrical current, are made available to the supplier at the Installation Site in the necessary scope or as specified in the Agreement, before the installation begins. This shall be provided at no cost to the supplier, who shall not pay for the use of such water and power.
Furthermore, the buyer shall provide, free of charge, lockable or otherwise secured premises or storage facilities suitable for protecting the Equipment, the supplier’s tools, and equipment against theft and damage, at or near the Installation Site.
Samples of the Equipment During Manufacture. Inspection
14. If the Equipment is to be tested during manufacture according to the Agreement, the test shall be carried out at the place of manufacture unless otherwise agreed. If technical requirements for the test are not agreed upon, it shall be performed in accordance with the customary practice of the relevant industry in the country where the Equipment is manufactured.
15. The supplier shall notify the buyer by Written Notice of the test referred to in clause 14 with sufficient time for the buyer to be present. The test may proceed even if the buyer is not represented, provided that such notice has been given.
The supplier shall keep a record of the test. The test report shall be sent to the buyer and shall be considered a correct description of the test execution and its results unless the buyer proves otherwise.
16. If the Equipment proves not to comply with the Agreement during the test referred to in clause 14, the supplier shall as soon as possible ensure that the Equipment is brought into conformity with the Agreement. Upon the buyer’s request, a new test shall then be carried out. However, if the defect is insignificant, a new test may not be requested.
17. The buyer also has the right, to a reasonable extent or to the extent specified in the Agreement, to inspect the manufacture of the Equipment during normal working hours and with three days’ notice.
18. Unless otherwise agreed, the supplier shall bear all costs of tests carried out at the place of manufacture. However, the buyer shall bear all costs for their representatives, including travel and accommodation expenses, in connection with such tests and inspections as referred to in clause 17.
Buyer’s Delay and Related Matters
19. If the buyer finds that he will not be able to take the measures he is obligated to at the agreed time in connection with the execution of the Delivery, including the obligations under clauses 9, 12, and 13, or if such delay on his part is likely, he shall without undue delay give the supplier Written Notice thereof. At the same time, he shall state the cause of the delay and, as far as possible, how long the delay is expected to last.
Notwithstanding the buyer’s delay in fulfilling his obligations under the first paragraph, he shall still pay any conditional payments due for the supplier’s services as if no delay had occurred.
20. If the buyer is delayed in or otherwise breaches his obligations, including those under clauses 9, 12, and 13, he shall compensate the supplier for any additional costs thereby incurred, in addition to any claims under clause 23, second paragraph. The supplier is entitled to a reasonable extension of the delivery time as a result of the buyer’s breach. If the supplier intends to claim an extension, he shall without undue delay give the buyer Written Notice thereof.
If the breach is material, the supplier may refuse to continue with the delivery and installation until the matter is remedied. If the buyer has not remedied the matter within one month after receiving Written Notice from the supplier that he intends to exercise his right to terminate, the supplier may terminate the Agreement by sending a new Written Notice to the buyer.
In the event of termination, the supplier may claim damages from the buyer for harm caused by the buyer’s breach. Such damages shall not exceed the Contract Price.
Payment
21.1 For installation charged on account:
One-third of the agreed price for the Equipment no later than 30 days after the conclusion of the Agreement.
One-third of the agreed price for the Equipment no later than 30 days after the Equipment has been declared ready for delivery from the factory.
One-third of the agreed price for the Equipment no later than 30 days after the Equipment has arrived at the Installation Site.
Payment for installation work shall be made based on monthly invoices with a 30-day payment term from the invoice date.
21.2 For installation at a fixed price included in the Contract Price:
30% of the Contract Price no later than 30 days after the conclusion of the Agreement.
30% of the Contract Price no later than 30 days after the Equipment has been declared ready for delivery from the factory.
30% of the Contract Price no later than 30 days after the Equipment has arrived at the Installation Site.
The remainder of the Contract Price no later than 30 days after acceptance.
22. If installation is agreed to be charged on account, the following items shall be invoiced separately:
22.1 All travel expenses (including local transportation costs) for the supplier’s personnel, as well as costs for transporting the personnel’s tools and personal effects.
22.2 Expenses for board and lodging and other subsistence costs for the supplier’s personnel for each day of absence from their home location, including rest days and public holidays. Unless otherwise agreed, the highest rates for per diem and travel allowances for government employees in the supplier’s country shall apply, valid for travel to the country where the installation is performed.
22.3 Payment for work performed during regular working hours based on hours certified by the purchaser.
22.4 Payment for overtime work based on hours certified by the purchaser.
22.5 Payment at regular working hour rates for time spent on:
a) necessary preparation for outbound and return travel;
b) outbound and return travel as well as any other travel, calculated in accordance with applicable laws, regulations, or collective agreements in the supplier’s home country;
c) daily travel between lodging and the Installation Site, provided that the travel time per day exceeds 30 minutes, unless a different time limit is set by the applicable collective agreement in the supplier’s country.
22.6 Expenses incurred by the supplier for providing equipment in accordance with the agreement, including payment for the use of the supplier’s own assembly equipment.
22.7 Payment for waiting time at ordinary hourly rates, if work is delayed due to circumstances for which the supplier is not responsible under these terms or the Agreement otherwise.
22.8 Taxes and duties payable on the invoiced amount, which are to be borne by the supplier.
23. If installation at a fixed price has been agreed upon, all expenses referred to in clauses 22.1–22.6 are included in the payment for the installation. In addition, value-added tax or equivalent duties apply. If the installation work is changed, delayed, or temporarily suspended due to reasons for which the buyer or the buyer’s other suppliers are responsible, the supplier shall, in addition to the agreed installation price, be entitled to payment for:
23.1 Waiting time and time spent on additional travel.
23.2 Extra work, including work related to dismantling, securing, and reinstalling installation equipment.
23.3 Costs incurred because the supplier’s equipment must remain at the installation site longer than anticipated.
23.4 Additional expenses for travel and accommodation for the supplier’s personnel.
23.5 Other expenses and costs that the supplier can document have been incurred due to changes in the installation work.
24. If the buyer does not pay at the agreed time, the supplier shall be entitled to interest on late payment from the due date at the interest rate applicable under the legislation on interest for late payments in the supplier’s country. If the supplier’s country is Denmark, the interest rate on late payments shall be the official discount rate plus 9 percentage points.
24.1 If the buyer has not paid the overdue amount within 3 months, the supplier is entitled, by written notice to the buyer, to terminate the Agreement and, in addition to the interest on late payment, claim compensation from the buyer for the loss suffered. The compensation shall not exceed the Contract Sum.
Reservation of Ownership
25. The equipment remains the property of the supplier until full payment has been made, to the extent that such retention of title is valid under applicable law.
Installation Work
26. At the latest upon the Supplier’s notification that the Equipment is ready for delivery from the factory, both parties shall, by written notice, appoint their respective representatives to act during the daily work at the Installation Site. The representatives shall be present during working hours at or near the Installation Site. Unless otherwise agreed, they shall have full authority to act on behalf of their respective parties in all matters concerning the installation work. Wherever these terms require written notice to be given, the appointed representative is always authorized to receive such notice on behalf of their party.
27. Unless otherwise agreed, the Buyer shall, at its own expense, provide the necessary unskilled labor for the Supplier’s use at the Installation Site. The Supplier shall specify its ongoing need for unskilled labor with one week’s notice.
28. Unless otherwise agreed, the Buyer shall, at its own expense, provide cranes, lifting equipment, scaffolding, and equipment for internal transport for the Supplier’s use at the Installation Site to the extent such equipment is necessary to carry out the installation. The Supplier shall specify the required equipment by Written Notice no later than one month before the start of the installation work.
29. The Supplier is obligated to ensure that the safety regulations applicable at the Installation Site are observed by its personnel. This provision does not affect the Buyer’s obligations under clause 9. The Buyer may demand that Supplier’s personnel who do not comply with these safety regulations be denied access to the Installation Site.
30. The Supplier shall, by Written Notice, provide the Buyer with necessary information about any special risks to the surroundings that may be associated with the installation of the Delivery.
31. The Buyer may not assign any work to the Supplier’s personnel without consent given by Written Notice from the Supplier.
Supplier’s Right to Inspection
32. The Supplier is entitled, at any time during the work at the Installation Site and at their own expense, to inspect the Delivery. This right applies until the Delivery has been taken over and thereafter during all work carried out pursuant to the provisions in clauses 52-66.
Changes
33. Until the takeover has taken place, the Buyer may, subject to the limitations set out in clause 36, request Changes to the scope, design, and execution of the originally agreed Delivery. Requests for changes must be made by Written Notice to the Supplier and must include an accurate description of the desired change.
34.The Supplier may, until the takeover has taken place, propose such Changes as mentioned in clause 33, first paragraph, by Written Notice.
35. As soon as possible after receiving the request for a change, or after having submitted a proposal for a change, the supplier shall provide the buyer with Written Notice stating whether and how the Change can be carried out, as well as the resulting changes to the Contract Price, delivery time, and other contractual terms. The supplier shall also provide such notice to the buyer when changes in laws, regulations, and provisions as mentioned in clause 8 give rise to alteration work.
36. Except as provided in clause 8, the supplier is not obliged to carry out changes before the parties have entered into a written agreement regarding the consequences of the changes for the Contract Price, delivery time, and any other contractual terms. If the parties cannot reach an agreement on the contractual consequences of such alteration work as referred to in clause 8, the supplier shall carry out the work on a cost-reimbursable basis until the parties reach an agreement or a resolution is achieved pursuant to clause 71.
Acceptance Tests
37. When the installation work has been completed, acceptance tests shall, unless otherwise agreed, be carried out to determine whether the Delivery is in conformity with the Agreement. The technical requirements for the performance of the acceptance test shall be as specified in the Agreement. If no such technical requirements have been agreed, the test shall be carried out in accordance with generally accepted practice and commonly used standards in the country where the Installation Site is located. The supplier shall give the buyer Written Notice that the Delivery is ready for acceptance. At the same time, the supplier shall set a reasonable deadline for the performance of the acceptance tests. The parties shall then jointly agree on a time for carrying out the tests. Unless otherwise agreed, the tests shall take place during the buyer’s normal working hours.
The tests shall be carried out under the direction of the supplier and shall be attended by representatives of both parties.
If the buyer is unable to attend at the agreed time for the acceptance tests, the supplier shall, by Written Notice to the buyer, set a new date for such tests. The buyer is entitled to a reasonable notice period before the test is conducted.
If the buyer fails to attend the rescheduled acceptance test, the test may be conducted without the buyer’s presence. In such case, the supplier is entitled, at the buyer’s expense, to summon an independent expert to witness the test.
The supplier shall prepare a test report (protocol) documenting the acceptance test. This report shall be sent to the buyer.
The test report shall be deemed to provide an accurate description of the performance and results of the acceptance test, unless the buyer proves otherwise.
38. If the Delivery is found not to be in conformity with the contract during an acceptance test, the supplier shall, as soon as possible, bring the Delivery into contractual compliance. A new acceptance test shall then be carried out, unless the parties agree to waive it or the deviations from contractual compliance are of no operational significance. Clause 37 shall apply correspondingly to the new acceptance test.
39. The buyer shall, at no cost to the supplier, provide power, fuel, lubricants, water, raw materials, and other materials necessary for carrying out the acceptance tests in accordance with clauses 37 and 38, as well as for any final adjustments in connection with these tests. The buyer shall also, at no cost to the supplier, install the equipment and make available the labour required for the performance of the acceptance tests.
40. If the buyer fails to fulfil his obligations under clause 39, or otherwise fails to cooperate in the acceptance tests so that they cannot be carried out after having received the supplier’s notice pursuant to the third paragraph of clause 37, a satisfactory acceptance test shall be deemed to have been carried out at the expiry of the deadline set by the supplier in the notice.
Acceptance
41. The buyer shall be deemed to have accepted the Delivery:
a) as soon as the acceptance tests have been carried out or shall be considered as having been carried out in accordance with clauses 37–40, or
b) if it has been agreed that acceptance tests shall not be carried out, when the Written Notice referred to in the first sentence of the third paragraph of clause 37 has been received by the buyer, and the Delivery is in the condition required under the Agreement at the time of acceptance.
Minor adjustments and completions of the Delivery without operational significance shall not prevent acceptance.
The buyer shall, without undue delay, confirm in Writing to the supplier that the Delivery has been accepted and shall also confirm the date of acceptance.
Failure to provide such confirmation shall not affect the assessment of whether acceptance has taken place. Prior to acceptance of the Delivery, the buyer is not entitled to use the Delivery or any part thereof. If the buyer uses the Delivery or any part thereof without the supplier’s Written Consent, the buyer shall thereby be deemed to have accepted the Delivery. The supplier’s obligation to carry out acceptance tests shall then cease.
42. Unless otherwise agreed, the risk for the Delivery passes to the buyer upon acceptance.
If it has been agreed that the buyer shall receive the Equipment at the Installation Site, he is obliged to immediately inspect the Equipment and promptly notify the supplier in Writing of any transport damages.
Delivery Time/Delay
43. The Delivery shall be deemed delivered on the day it is accepted in accordance with the provisions of clause 41.
44. If the parties have specified a time period within which the acceptance shall take place, instead of a specific date for acceptance, such time period shall be deemed to commence from the conclusion of the Agreement.
45. If the supplier finds that he cannot complete the Delivery on time, or if a delay on his part is likely, he shall without undue delay give the buyer Written Notice thereof. The supplier shall simultaneously state the cause of the delay and, as far as possible, when the Delivery will be ready for acceptance.
If the supplier fails to give the aforementioned notice, he shall, notwithstanding the provisions of clauses 47 and 48, compensate the buyer for any additional expenses incurred as a result of the failure to notify.
46. If the acceptance is delayed due to a circumstance which, pursuant to clause 68, constitutes a ground for exemption from liability, or due to an act or omission by the buyer or the buyer’s other suppliers, or as a result of a change pursuant to clauses 8 and 33–36, the delivery time shall be extended to the extent reasonably justified under the circumstances. The delivery time shall be extended even if the cause of the delay occurs after the originally agreed acceptance date.
47. If the Delivery is not accepted on time in accordance with clause 41, the buyer shall be entitled to a liquidated damages penalty from the day the acceptance was due. The liquidated damages shall amount to 0.5% of the Contract Price for each full week of delay. The total liquidated damages shall not exceed 7.5% of the Contract Price. The liquidated damages shall be payable upon demand by Written Notice from the buyer, but not earlier than on the day of final acceptance of the entire Delivery, or at the time when the buyer terminates the Agreement pursuant to clause [insert relevant clause number].
48. The buyer shall forfeit his right to liquidated damages if he has not submitted a claim by Written Notice within 6 months after the acceptance was due.
49. If the buyer is entitled to the maximum liquidated damages under clause 47 and the Delivery has still not been accepted, the buyer may, by Written Notice to the supplier, demand that the Delivery be completed for acceptance testing within a final reasonable deadline, which shall not be less than one week.
If the supplier has still not completed the Delivery within this deadline, and this is not due to circumstances for which the buyer or the buyer’s other suppliers are responsible, the buyer may by Written Notice to the supplier terminate the Agreement.
In the event the buyer terminates the Agreement in this manner, the buyer shall furthermore be entitled to compensation for the loss suffered due to the supplier’s delay, provided that such loss exceeds the maximum liquidated damages that could have been claimed under clause 47.
This compensation shall not exceed 7.5% of the Contract Price. Furthermore, the buyer shall have the right to terminate the Agreement by Written Notice to the supplier if it becomes evident that a delay will occur which, according to the provisions of clause 47, would entitle the buyer to the maximum liquidated damages. In such termination, the buyer shall be entitled to both the maximum liquidated damages and compensation pursuant to the third paragraph of this clause.
49. Except for liquidated damages under clause 47 and termination with limited compensation under clause 48, any claim by the buyer arising from the supplier’s delay shall be excluded. This limitation of the supplier’s liability shall not apply if the supplier has acted with gross negligence.
Liability for Property Damage Before Acceptance (Product Liability)
50. The supplier shall be responsible for any damage to the Delivery occurring before the risk has passed to the buyer. This applies regardless of the cause of the damage, unless the damage is caused by the buyer or any party for whom the buyer is responsible. Even if the supplier is not liable for damage to the Delivery under this clause, the buyer may require the supplier, at the buyer’s expense, to remedy the damage.
51. The supplier shall be solely liable for damage to the buyer’s property prior to acceptance of the Delivery, if it can be proven that the damage was caused by the negligence of the supplier or by someone for whom he is responsible in connection with the execution of the Delivery. However, the supplier shall in no event be liable for loss of production, loss of profit, or other consequential economic losses.
Liability for Defects
52. The supplier is obligated to remedy all defects caused by errors in design, materials, or workmanship by repairing or replacing the Delivery in accordance with clauses 53–65 below.
53. The supplier’s liability shall only cover defects that appear within 1 year from the day the Delivery is accepted in accordance with clause 41. If the Delivery is used more intensively than agreed or more intensively than could reasonably be expected at the time of the Agreement’s conclusion, this period shall be proportionally shortened.
54. For parts of the Delivery that have been repaired or replaced in accordance with clause 52, the supplier assumes the same obligations that applied to the original Delivery for a period of 1 year. For the remaining parts of the Delivery, the period mentioned in clause 53 shall be extended by the amount of time the Delivery has not been usable due to defects covered by clause 52.
55. The buyer shall give Written Notice to the supplier of a defect without undue delay after the defect has appeared, and in no event later than 2 weeks after the deadline mentioned in clause 53 has expired, cf. clauses 54 and 65. The notice shall include a description of how the defect manifests itself. If there is reason to believe that the defect may cause a risk of damage, such notice shall be given immediately. If the buyer fails to notify the supplier of a defect by Written Notice within the time limits specified in this clause, the buyer shall lose the right to make a claim arising from the defect.
56. Upon receipt of Written Notice in accordance with clause 55, the supplier shall remedy the defect without undue delay. The supplier shall bear the costs in accordance with the provisions of clauses 52–64. The remedy shall be carried out at the Installation Site, unless the supplier finds it appropriate that the defective part or possibly the Equipment be returned so that the supplier can carry out the repair or replacement at their own facility.
If dismantling and installation of the part requires special expertise, the supplier is obligated to perform such dismantling and installation. If such special expertise is not necessary, the supplier’s obligation regarding the defective part shall be considered fulfilled once the supplier has delivered a properly repaired or replaced part to the buyer.
57. If the remedy of the defect pursuant to clause 56 is to be carried out at the Installation Site, clauses 9, 13, and 51 shall apply correspondingly.
58. If the buyer has given such notice as mentioned in clause 55, and it turns out that no defect exists for which the supplier is responsible, the supplier shall be entitled to compensation for the work and expenses incurred as a result of the complaint.
59. If any dismantling and installation involve intervention in parts other than the Delivery, the work and costs related thereto shall be borne by the buyer.
60. Any shipment in connection with repair or replacement shall be at the supplier’s expense and risk. The buyer shall follow the supplier’s instructions regarding the method of shipment. The buyer shall bear any additional costs incurred by the supplier in remedying defects due to the Delivery being located at a place other than the Installation Site.
61. Defective parts replaced pursuant to clause 52 shall be made available to the supplier and shall become his property.
62. If the supplier does not fulfill his obligations under clause 56 within a reasonable time, the buyer may by Written Notice give the supplier a final deadline for fulfillment. If the obligations are not met by the expiry of the set deadline, the buyer may at his discretion:
a) have the necessary repairs carried out and/or have new parts manufactured at the supplier’s expense and risk, provided that this is done in a reasonable and fair manner, or
b) demand a proportional reduction, however, not exceeding 15% of the Contract Price.
If the defect is substantial, the buyer may instead terminate the Agreement by Written Notice to the supplier. The buyer also has the right to terminate the Agreement if the defect remains substantial after measures as mentioned under a). Upon termination, the buyer may claim compensation for his loss, but not exceeding 15% of the Contract Price.
Contract Price.
63. The supplier’s liability does not cover defects caused by materials provided by the buyer, by designs prescribed or specified by the buyer, or by incorrectly performed preparatory work carried out by the buyer.
64. The supplier’s liability covers only defects that arise under the working conditions assumed in the Agreement and during proper use of the Delivery. The liability does not cover defects caused by circumstances occurring after the takeover according to clause 41. For example, it does not cover defects due to inadequate maintenance by the buyer, changes to the Delivery made by the buyer without the supplier’s written consent, or repairs carried out incorrectly by the buyer. Finally, the liability does not cover normal wear and tear and deterioration.
65. Notwithstanding the provisions of clauses 52-64, the supplier’s liability for defects does not apply to any part of the Delivery beyond 2 years from the takeover according to clause 41.
66. The supplier has no liability for defects beyond what is prescribed in clauses 52-65. This applies to any loss the defect may cause, including operational loss, lost profits, and other economic consequential damages. This limitation of the supplier’s liability does not apply if the supplier has been guilty of gross negligence.
Liability for Property Damage Caused by the Delivery After Takeover (Product Liability)
67. The Buyer shall indemnify the Supplier to the extent that the Supplier is held liable towards third parties for such damage and loss for which the Supplier is not liable to the Buyer under the second and third paragraphs of this clause.
The Supplier is not liable for damage caused by the Delivery after takeover:
a) to real property or movable property occurring while the Delivery is in the Buyer’s possession,
b) to products manufactured by the Buyer, or to products in which these are incorporated, or for damage to real property or movable property caused by such products as a result of the Delivery.
Under no circumstances shall the Supplier be liable for loss of production, loss of profit, or other economic consequential damages. The aforementioned limitations of the Supplier’s liability do not apply if the Supplier has been guilty of gross negligence.
If a third party makes a claim against either party for damages under this clause, that party shall immediately notify the other.
The Supplier and the Buyer are mutually obligated to submit to the jurisdiction of the court or arbitration tribunal handling claims for damages brought against either of them based on injury or loss alleged to have been caused by the Delivery. However, the mutual relationship between the Buyer and the Supplier shall always be resolved by arbitration in accordance with clause 71.
Exemption from liability (force majeure)
68. The following circumstances shall exempt from liability if they prevent the fulfillment of the Agreement or make its fulfillment unreasonably burdensome: labor disputes and any other circumstances beyond the control of the parties, such as fire, war, mobilization or military conscription of similar scope, requisition, seizure, currency restrictions, riots and disturbances, lack of means of transport, general shortage of goods, restrictions on fuel, as well as defects in or delays of deliveries from subcontractors caused by any of the circumstances mentioned in this clause. Such circumstances shall only exempt from liability if their impact on the fulfillment of the Agreement could not have been foreseen at the time the Agreement was concluded.
69.The party wishing to invoke any force majeure grounds referred to in clause 68 shall promptly notify the other party in writing of its occurrence and cessation. In the event of force majeure on the part of the buyer, the buyer shall cover the costs incurred by the supplier to secure and protect the Delivery. Furthermore, the buyer shall cover the supplier’s expenses for personnel, subcontractors, and equipment that are kept on standby, with the buyer’s consent, for the resumption of work on the Delivery.
70.Notwithstanding anything else in these terms and conditions, either party may terminate the Agreement by written notice to the other party if the performance of the Agreement is prevented for more than 6 months by an event referred to in clause 68.
Disputes and Choice of Law
71.Disputes arising from the agreement and everything related thereto cannot be brought before the courts but must be settled by arbitration in accordance with the arbitration laws applicable in the supplier’s country.
72.All legal questions that may arise in connection with the agreement shall be governed by the law of the supplier’s country.